Two high-profile apartment projects that were denied tax-credit funding in March were recently awarded the credits they need to proceed.
The developers of one of the projects, a $30 million renovation and expansion of the 15-story Lugar Tower at 901 Fort Wayne Ave., got permission in June from the Indiana Housing and Community Development Authority to sell $29 million in tax credits to finance the project.
The Lugar Tower project is to be co-developed by the Indianapolis Housing Agency and Flaherty & Collins Properties. It was placed on a waiting list for tax credits in March but was notified about a month ago that a combination of new and unused credits had become available, said Bruce Baird, Indianapolis Housing Agency’s director of strategic planning and development.
Baird said the agency hopes to sell the credits for about 70 cents on the dollar and start construction early next year. The project, which is being designed by national firm Looney Ricks Kiss, involves rehabbing the 220-unit tower, which was built in 1974. Another 74 units are to be built in a pair of three-story buildings that will be developed along Fort Wayne Avenue.
The Lugar Tower renovation and expansion is part of a massive upgrade of the Indianapolis Housing Agency’s housing portfolio in recent years. More than 1,300 of its almost 1,800-unit portfolio are being upgraded and 229 units are being added.
Another project that was recently awarded credits after being put on a waiting list could begin to transform the long-troubled Meadows area on the north side of 38th Street near Sherman Drive.
Strategic Capital Partners was awarded $19 million in credits that will be sold to help finance construction of The East Village at Avondale, a 248-unit apartment complex that will be built on about 15 acres of land that Strategic Capital put under contract early this year.
SCP, a five-year-old real estate investment management firm run by former Duke Associates partner Gene Zink and former city official Mike Higbee, expects to raise about $13 million in equity from selling the credits, Higbee said. Chicago-based National Equity Fund is the likely buyer of the credits.
The developer is considering its options for financing the balance of the $25 million project, said Higbee, who was head of the city’s Department of Metropolitan Development in the 1980s.
The apartment complex, construction of which is to begin by Oct. 15, will include 173 units for tenants who meet affordable housing income guidelines. The rest, about 30 percent, will be market rate units, Higbee said.
The developer of the project is a joint venture of SCP, Mishawaka-based The Sterling Group, Meadows Community Foundation and the city of Indianapolis. Some of the land for the development is being purchased from a Pentecostal church that previously tried to spur development in the area. The balance is land the city is transferring to the Meadows foundation. The development group is leasing the land from the foundation in a long-term lease that will provide the foundation with an income stream it can devote to its mission of improving the surrounding neighborhood.
Higbee said the property is among about 80 acres his group controls in the area. The East Village at Avondale project is the first phase of a development that is to include additional housing—both apartments and single-family—and retail development fronting 38th Street. Planning is also underway for a community center to serve the neighborhood. Higbee said some of the land might be set aside for recreational fields to serve the community and nearby schools.